Thank you for joining this webinar on the Open Networks Standard - - PowerPoint PPT Presentation

Thank you for joining this webinar on the Open Networks Standard Flexibility Contract.

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Company Primary Representative SSEN-D Alex Howison – Product Lead Gemma Lampert NG (SO) Andrew Rice NIEN Andy Smith NPG Andrew McKenna SPEN-D Wendy Mantle ENWL Lois Clark UKPN Stathis Mokka, Helen Hassan & Rebecca Slattery WPD Helen Sawdon

WS1 P4 Members in 2020

ON WS1A P4 – Common agreement

Agenda Overview Engagement and Feedback Implementation Pan Focus points for Review Doc ownership & review process Summary

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ON WS1A P4 – Common agreement

Overview

• Common Agreement has been developed using source information provided by all DNO’s and the ESO from existing

contracts/agreements and those in development

• The agreement has been constructed using the examples of good/best practice identified in the June 2019 P4 report
• Stakeholder feedback has been collected at Presentations, workshops and consultations and has supported the

development of the agreement structure, content, clauses and schedules.

• External legal support has been secured by the ENA to aid with drafting and finalisation of the agreement as well as
• ffering non-industry perspective on the agreement structure, weighting and content.
• The agreement is available to view/download now on the ENA Website;

https://www.energynetworks.org/electricity/futures/open-networks-project/workstream-products-2020/ws1a- flexibility-services.html

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ON WS1A P4 – 2020 Timeline

March 2020

• Version 1 finalised and approved
• Implementation plans for DNO’s released alongside version 1

April – June 2020

• ESO Alignment work commences (expected to lead to version 2)
• Defined stakeholder engagement and feedback period
• DNO’s commence adoption of version 1

June – December 2020

• ESO alignment works drive updated version 2 drafting
• Further ‘active’ engagement planned for August-October, either webinar, meeting or consultation based
• Version 2 expected release December 2020

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ON WS1A P4 – Implementation plan

• All DNO’s and the SO have confirmed the P4 Standard Agreement will be implemented across

2020

• DNO’s have confirmed the Agreement will be used for all Flexibility Services, SO to confirm

which services the Agreement will be implemented against

• Legacy contract durations are Organisation specific, but range from 4 months to 3 years
• Each Organisation committed to internal approval and adoption process as per this plan
• Each Organisation contributing to Version 2 works with a wider SO rollout and DNO

implementation expected December 2020

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ON WS1A P4 – Implementation timeline

April 2020 December 2020 April 2021 August 2020

Common Agreement Adoption Legacy Agreement Duration Partial Adoption (Some services)

SSEN SPEN ENWL NPG UKPN WPD NGESO NIEN

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ON WS1A P4 – Implementation plan - Key dates

Organisation Standard Agreement Implementation Legacy Contract Duration SSEN April 2020 April 2021 ENWL April 2020 April 2023* WPD June 2020 September 2021 NPG November 2020* April 2021 SPEN April 2020 November 2020 UKPN October 2020 April 2023* NIEN July 2020 October 2020 NGESO July 2020** TBC

* Estimated Dates to be confirmed **Estimated date and only for partial services, full implementation expected 2021

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ON WS1A P4 – Common agreement – Focus Points

Key points for review

• Feedback from stakeholders and best practice points have been absorbed throughout the agreement
• Agreement has been formed around the basis of;
• Mutuality of clauses to create a fairer agreement
• Capping of most liabilities & indemnities to contract value, enabling an agreement which

works for both large and small service providers

• Common terminology, clauses and schedule structure
• Necessary variances, such as service specific requirements, pricing information, site

details and communication specifications have been moved to schedules

• Clauses have been simplified, reduced, merged and removed to create a dynamic,

simplified agreement

• ESO contribution to v1 has already provided initial alignment, ESO-DSO alignment works in 2020 combined with

feedback collated in the Apr-Jun engagement period will inform version 2

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ON WS1A P4 – Feedback examples

‘Contractual responsibilities should be proportionate to contract values’ to give a more level playing field for smaller providers The majority of liabilities and indemnities are now capped at contract value Contracts should allow stackable revenues Contracts are based on a non-exclusive agreement, providing defined service window commitments can be met

Significant variations in service provision covered by ‘variations’ could be seen as a form of bilateral and avoid tendering for new services Service variations are now limited in time/duration and size, significant changes will require new tendered services DNO’s should offer long and short-term contracts as long as requirements are clear Service requirements specifically covered within defined schedules and contract terms standardised within 1-5yr durations

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ON WS1A P4 – Common agreement – Focus Points

Key points for review

• There is still discussion required on Indemnities, Liabilities and Insurances to ensure as close to a ‘one size fits all’

approach can be implemented, further refinement of these clauses is expected for Version 2 of the agreement.

• There are a range of processes or systems used across the SO and DNO’s in the procurement, management and

settlement of flexibility services, clauses and schedule detail have been designed to allow these variances while the industry evolves a standard approach.

• New service types or innovations projects seeking to understand wider market interactions may opt to use a variance
• f the standard contract, with learning feeding back into future versions.
• Original ‘Good Practice’ points will also be revisited as the market, services and management techniques evolve and

services become adopted on a more widespread fashion.

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ON WS1A P4 – Common agreement – Focus Points

Key points for review

• Time/notice requirements are now broadly equivalent if not the same across the adopting organisations, for example

in termination notices, invoicing times and communication requirements.

• The agreement has and will continue to take input from the wider Open Networks products, such as dispatching and

settlement processes and service alignment works underway within WS1A

• Legal support from the host organisations has been sustained throughout the P4 works.
• External legal support secured by the ENA has carried out ‘normalization’ works to ensure the contract is accessible,

linear and formatted correctly. A breakdown of specific clauses/schedules and key points of note has also been produced by CMS, also available here; https://www.energynetworks.org/electricity/futures/open-networks- project/workstream-products-2020/ws1a-flexibility-services.html

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ON WS1A P4 – Ongoing Review Process

• ENA will host the final agreement – Flexibility Services Common Agreement V1
• Defined Stakeholder engagement and feedback will be undertaken April-June 2020
• P4 Product team to continue activities (DSO-SO alignment) until December 2020 – likely to release Flexibility Services

Common Contract V2 end of December

• Post 2020, Contract review board (to consist of original P4 members/DNO & ESO representation) to meet bi-annually

to discuss industry changes, new service alignment and feedback with the output of implementing document update as required

• Ongoing feedback to be collected individually and through ENA webpages/events & direct feedback to DNOs/ESO
• Ad-hoc meetings and change consultations to bolster bi-annual reviews as required
• In 2023 Review board and ENA to discuss potential to codify Agreement

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ON WS1A P4 – Common agreement - Summary

Feedback and good practise points integral to version 1 complete All contributing DNOs & ESO have approved this version for implementation Agreement designed to be simple, accessible and fair for all providers Next feedback round will inform version 2, expected in Dec 2020 ENA hosting will enable ongoing ‘active’ feedback from providers post 2020